Symphony (SYML) is the largest Air Cooler company in India, with 50% value market share (40% volume) in the organized market. It commands 10-12% pricing premium over competitors and sells its products on advance payment, a testimony of its strong brand equity. The company outsources 100% of its domestic production through its tie ups with 9 OEMs thereby reducing the risk of reliance on a single source and enabling it to remain asset-light. Its outsourcing model leaves SYML’s management free to focus on innovation, marketing and brand building. Given its asset-light business model, SYML reports strong capital efficiency, RoCE > 40%. We expect SYML to record 25% revenue CAGR and 30% PAT CAGR over FY14-16E. Margins are likely to improve to 24.5% in FY16E as against 22.5% in FY14E. Its market leadership coupled with strong growth prospects for the industry and healthy financial metrics (debt free; 40%+ RoCE) are reasons why we like the stock. It currently trades at 11.3x FY16E EPS. We initiate coverage with a
Buy rating. Our target price is INR650 (15x FY16E EPS), implying an upside of 33%
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